Roxgold receives signed Mining Convention and provides Yaramoko development update
TORONTO, Aug. 4, 2015 /PRNewswire/ - Roxgold Inc. (ROG: TSX.V) ("Roxgold or the "Company") is pleased to report that it has received the signed Mining Convention confirming the previously announced Presidential Decree as issued in accordance with the 2003 Burkina Faso Mining Code. In addition, the Company provides an update of the ongoing development of the Yaramoko Gold Project.
- Signed Yaramoko Mining Convention received from the Burkina Faso Ministry of Mines
- Overall Construction program approximately 25% complete
- Bulk earthworks approximately two thirds complete
- Water Storage Facility completed and collecting water from current wet season
- Mine Access Boxcut completed with portal ground preparations commenced
- Permanent Accommodation camp approximately two thirds complete
- Project on track, with approximately US$ 25M of US$ 110.8M spent to date
- Project Financing signed and progressing to initial drawdown
- Project Commissioning targeted for mid-2016
- Cash on hand of approximately US$ 24M at the end of July
Activities on site at Yaramoko are advancing at an encouraging rate. Since breaking ground at the project in late March, works have been significantly advanced in all areas. Early works have focused on the critical path activities of bulk earthworks, camp construction and procurement.
Over 700 personnel are now on site working on the project and all contractors associated with the project have mobilized with works advancing simultaneously on all fronts. As at the end of July, the company had spent approximately US$ 25 million and remains on target to complete the project within the budget of US$ 110.8 million.
"We are very pleased with the start of activities to date as the project continues according to plan and budget" commented John Dorward, President & CEO. "Initial progress has been encouraging and we are well placed to advance the construction of Yaramoko with key items of equipment and both major contractors now on site."
The bulk earthworks scope is well advanced and approximately 4 weeks ahead of schedule and approximately two thirds complete. The Water Storage Facility is completed and now collecting water this wet season. The Tailings Storage Facility embankment is also completed. Both of these structures have been constructed as per design and budget.
The construction of the 190 man accommodation camp is progressing well and is approximately 70% complete. All accommodation building brickwork has been finished and roofing is well advanced. Painting, tiling and final fit out of the residential quarters is advancing, with several blocks nearing completion. Brickwork for the kitchen, laundry and recreational complexes is continuing. Reticulation of plumbing and electrical services is well advanced and expected to be completed in August. Handover and commencement of occupancy is planned for September.
The boxcut excavation is completed, as are the ground support works around the portal in advance of collaring the ramp portal. The underground contractor, an affiliate of African Underground Mining Services Ltd. ("AUMS"), has mobilized key personnel and equipment to site. The explosives magazine is under construction with completion expected in August. Pouring of the concrete footings for the corrugated liner plate tunnel ("Armtec Tunnel") accessing the underground workings has commenced.
The lump sum EPC contractor (DRA/Group Five Joint Venture) has mobilized and is on site with establishment activities well advanced. The bulk earthworks in the processing plant are completed and the area now handed over to the EPC contractor. Concrete pouring for footings in the SAG mill, reclaim vault, CIL and crusher areas are now well advanced. Procurement activities are well advanced with all long lead contracts placed by the EPC contractor.
Long lead procurement
Critical path procurement activities are progressing well. The SAG mill is largely procured with the mill shell, motors and cast in items now on site. All SAG mill components are expected to be in country in August. The complete Armtec Tunnel for the underground access is now on site. Long lead items on the high voltage powerline such as detailed design, tower steel and transformer are well advanced with components starting to arrive on site.
Roxgold Owners Team
Roxgold now has its full site management team in place with all operating department heads recruited and on site. This group, in addition to the project team, which has been on site for some time, are now working at developing the processes, systems and structures to ensure a smooth transition from development to operations in mid-2016.
As previously announced on June 9, 2015, Roxgold signed a credit agreement with Societe Generale Corporate & Investment Banking and BNP Paribas (collectively the "Banks"), providing for a US$ 75 million senior debt facility (the "Debt Facility"). The proceeds of the Debt Facility will be used for the development of the Yaramoko Project. Roxgold continues to make progress towards meeting the conditions precedent for the initial drawdown of the Debt Facility, including receipt of the signed copy of the Yaramoko Mining Convention from the Ministry of Mines, settling of the engineering, procurement and construction (EPC) contracts with its EPC contractors, Group Five Burkina Faso SARL, DRA Mineral Projects (PTY) Limited and Group Five Projects (PTY) Ltd., and completion of a gold hedging program totaling 65,000 ounces of forwards at an average price of US$ 1,052 per ounce to be settled on a monthly basis from January 2017 to March 2021. The Company is continuing to work to satisfy all remaining conditions precedent for the initial drawdown of the Debt Facility, and currently anticipates that drawdown will occur this quarter.
The Company currently has approximately US$ 24 million in cash on hand including US$ 15 million in the Cost Overrun Facility and the option, within the underground mining services contract with AUMS, to pay for mining services up to US$ 10 million in the form of Roxgold shares. In addition, as previously announced, the International Finance Corporation ("IFC") proposes to invest approximately US$ 15 million in the Company by means of a non-brokered private placement for common shares. Negotiations of the definitive subscription agreement are underway and Roxgold currently anticipates closing the private placement in September.
Craig Richards P. Eng, Principal Mining Engineer for Roxgold Inc., a Qualified Person within the meaning of National Instrument 43-101, has verified and approved the technical data disclosed in this press release.
Shareholders are encouraged to follow the progress of the Yaramoko Gold Project in our Photo Gallery on our website at www.roxgold.com
"Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release."
This news release contains forward-looking information. Forward looking information contained in this new release includes, but is not limited to, the expected completion of the balance of the AUMS equity financing facility and the IFC private placement and the terms thereof, and the expected use of proceeds thereof. These statements are based on information currently available to the Company and the Company provides no assurance that actual results will meet management's expectations. In certain cases, forward-looking information may be identified by such terms as "anticipates", "believes", "could", "estimates", "expects", "may", "shall", "will", or "would". Forward-looking information contained in this news release is based on certain factors and assumptions regarding, among other things, the estimation of mineral resources and mineral reserves, the realization of resource estimates and reserve estimates, gold metal prices, the timing and amount of future exploration and development expenditures, the estimation of initial and sustaining capital requirements, the estimation of labour and operating costs, the availability of necessary financing and materials to continue to explore and develop the Yaramoko Gold Project in the short and long-term, the progress of exploration and development activities, the receipt of necessary regulatory approvals, including the approval of the TSX Venture Exchange for the balance of the AUMS equity financing facility and the IFC private placement, the negotiation and entering into of definitive documentation with respect to the IFC private placement, and assumptions with respect to currency fluctuations, environmental risks, title disputes or claims, and other similar matters. While the Company considers these assumptions to be reasonable based on information currently available to it, they may prove to be incorrect.
Although the Company believes the expectations expressed in such forward-looking statements are based on reasonable assumptions, such statements are not guarantees of future performance and actual results or developments may differ materially from those in the forward-looking statements. Factors that could cause actual results to differ materially from those in forward-looking statements include: changes in market conditions, unsuccessful exploration results, changes in the price of gold, unanticipated changes in key management personnel and general economic conditions. Mining exploration and development is an inherently risky business. Accordingly, actual events may differ materially from those projected in the forward-looking statements. This list is not exhaustive of the factors that may affect any of the Company's forward-looking statements. These and other factors should be considered carefully and readers should not place undue reliance on the Company's forward-looking statements. The Company does not undertake to update any forward-looking statement that may be made from time to time by the Company or on its behalf, except in accordance with applicable securities laws.
SOURCE Roxgold Inc.